No user fee on arrival at Hyd airport: AERA

• Hyd Intl Airport's move is against concession agreement
• Airport approached regulator for tariff revision
• User development fee being levied on all embarking passengers

Hyderabad (PTI): The Airports Economic Regulatory Authority (AERA) has turned down the Rajiv Gandhi International Airport operator GMR's proposal of levying User Development Fee (UDF) on arriving passengers here.A Airports regulator AERE rejected the move by GMR Hyderabad International Airport (GHIAL), a subsidiary of GMR Group, saying that it is against the concession agreement the airport operator had with the government. "The authority has noted in para 23.92...That GHIAL's proposal of levying UDF on both departing and arriving passengers is at variance with the provisions of the Concession Agreement. The authority therefore has proposed to determine UDF only from the departing passengers as is indicated in the Concession Agreement," AERA said in its observation.

GMR recently approached the Airports Economic Regulatory Authority (AERA) for tariff revision. GMR is charging Rs 430 and Rs 1,700 per embarking domestic and international passenger, respectively.A The AERA allowed them purely on an ad-hoc basis, with effect from November 1, 2010, for a period of five years. According the consultation paper issued by AERA, GMR said UDF is proposed to be levied on both arriving and departing passengers (except on transfer/transit pax and infants) to ease burden on outgoing passengers.

In respect of UDF for domestic passengers, it proposed two bands - metro cities and non-metro cities. Delhi, Mumbai, Chennai, Kolkata and Bengaluru are covered under metro cities while all others are classified as non-metro cities. In case of international UDF, GMR has proposed two categories - SAARC and non-SAARC countries. SAARC member countries are Sri Lanka, Afghanistan, Bangladesh, Pakistan, Nepal, Bhutan and Maldives.

Under 'single-till' model, GMR wants to collect Rs 479.27 from passengers arriving from metro cities and Rs 319.15 from non-metro cities. Similarly, it wanted to collect Rs 585.77 from those going to metro cities and Rs 390.71 to non-metros.

For international passengers, it wants to collect Rs 1,737.51 from departing passengers (non-SAARC countries) and Rs 1,437.80 from arriving international passengers (non-SAARC countries). Under 'dual-till' model, it wanted to collect Rs 737.76 and Rs 603.62 for departing and arriving metro passengers, respectively.

Similarly, it wants to charge Rs 491.84 and Rs 402.41 from arriving and departing non-metro passengers, respectively. GMR wants to charge Rs 2,213.27 and Rs 1,437.80 under 'double till' from arriving and departing international passengers (non- SAARC countries).A The airport operator informed that passengers travelling to or from SAARC countries are proposed to be charged UDF at domestic metro rates under both single and dual till models.

According to the consultation paper, GMR wanted AERA not to adopt 'single till' model for tariff determination. Under the single-till approach, an operator's total revenues from non-aeronautical operations like retail shops, real estate development and car parking are taken into consideration for determining the user charges for passengers and airlines. A GMR spokesperson said the proposed dual till model was based on the concession documents of Hyderabad airport and globally, dual/hybrid till models are predominant in privatised airports.

"The advantages of such models are many and include adequate incentivisation to bidders at the bidding stage, thus encouraging private investments and also provide long-term incentive to enhance non-aero revenue to reduce dependence on aero revenue," the GMR official told PTI.

Further, dual/hybrid till airports generally have better performance standards and provide superior passenger experience, the official added.